Posts Tagged ‘testamentary capacity’

OCTOBER 31, 2016 VOLUME 23 NUMBER 41
In our legal practice, we frequently deal with individuals with limited capacity. Sometimes we speak of them being “incapacitated” or “incompetent.” Sometimes they are “disabled,” or qualify as “vulnerable adults,” or are subject to “undue influence.” But each of those terms means something specific, and some variations even do double duty (with two related but distinct meanings). A recent California case pointed out the confusion engendered when litigants rely on similar but different terms.

Aaron, a widower in his late 90s, lived alone after the death of his wife Barbara. He had no children of his own, though he and his wife had raised Barbara’s daughter Connie together after their marriage — when Connie was four. Aaron’s other nearest relatives were two nieces, Cynthia and Diane. He didn’t have much contact with Cynthia and Diane, though that might have been because his late wife had discouraged contact over the years they were together.

Connie was actively involved in overseeing Aaron’s care. She arranged for his doctor’s visits, went to his home at least twice a week to check on him, helped pay his bills and generally watched out for him. She was concerned about his ability to stay at home, and on several occasions she found herself summoning the local police to make welfare checks on her stepfather.

After Aaron fell in his home, refused treatment, and suffered a frightening seizure, he was diagnosed as having a subdural hematoma (from his fall). He spent some time in a hospital, but was anxious to return home. His physician noted that he had a poor score on the mental status exam administered in the hospital, and diagnosed him as having dementia. He was discharged to a nursing facility, with Connie’s help.

Aaron hated the nursing home, and the assisted living facility Connie helped move him to after that. He insisted that he could return to his own home. About this time, his nieces began to visit him, and they tried to assist. They disagreed with his placement, and niece Cynthia prepared a power of attorney for Aaron to sign, giving her authority over his personal and financial decisions. After he signed the document, he asked his attorney to write to Connie, asking her to return his keys and personal possessions so that he could return home.

Connie filed a petition for her own appointment as conservator of Aaron’s person and estate (California, confusingly, refers to guardianship of the person as conservatorship). While that proceeding was pending, Aaron went to his attorney’s office and changed his estate plan — instead of leaving everything to Connie, he would split his estate into three equal shares, with one each for Cynthia, Diane and Connie’s daughter.

The probate judge heard evidence in connection with Connie’s conservatorship petition, but denied her request. The judge found that Aaron was clearly subject to undue influence, and might lack testamentary capacity — but he didn’t need a conservator (of his person or his estate).

How could that be? Connie appealed, but the California Court of Appeals ruled that the probate judge was correct. At the time of the hearing on the conservatorship petition, according to the appellate court, Aaron was alert, oriented and able to describe his wishes. The fact that he might have been incapacitated when he signed the powers of attorney, or that he might have been subject to undue influence when he changed his estate plan, was not dispositive of the question of his capacity at the time of the conservatorship hearing. Furthermore, the mere fact of incapacity would not be enough; by the time of the trial Aaron had a live-in caregiver who could help him manage his daily needs, and that could support the probate judge’s determination that no conservator (especially of the person) would be necessary.

Aaron and his attorney also argued that Connie didn’t actually have any standing to file a court action in the first place. After all, she was his stepdaughter, and not even a blood relative. The Court of Appeals rejected that notion; any person with a legitimate interest in the welfare of a person of diminished capacity has the authority to initiate a conservatorship proceeding. Conservatorship of Mills, October 20, 2016.

So what do the various terms mean, and how are they different? “Capacity” (and “competence”) usually refers to the ability to make and communicate informed decisions. “Testamentary” capacity is a subcategory, and requires that the signer of a will must have an understanding of his or her relatives and assets, and the ability to form an intention to leave property in a specified manner. “Vulnerable adult” is a related term, but is used in most state laws to refer to a person whose capacity is diminished, and whose susceptibility to manipulation or abuse is therefore heightened. “Undue influence” can arise because of limited capacity, but refers to the actions of third persons which overpower the individual’s own decision-making ability. “Disability” is, perhaps, the least useful of the terms — attaching the term does not say much about an individual’s ability to make their own decisions, since disabilities can be slight or profound, physical or mental (or, of course, both), and subject to adaptive improvement in any case.

In Aaron’s case, it might well be that his amended estate plan will be found to have been invalid as a result of undue influence, and his new powers of attorney might be set aside on the same basis. He might even be found to have been a vulnerable adult and any transactions benefiting his nieces might be subject to challenge. But he apparently had the level of capacity necessary to make his own personal and financial decisions at the time of the hearing on the conservatorship petition.

As an aside, there’s another issue in Aaron’s court decision: the inappropriate reliance on scores obtained on short mental status examinations. Typically, medical practitioners ask a short series of questions (“What is the year?”, “Please repeat this phrase: ‘no ifs, ands or buts'” and the like) as a way of determining whether further inquiry should be made into dementia and capacity questions. Aaron variously scored 14, 18, 24 and 20 on 30-point tests administered by several interviewers, and both the probate court and the Court of Appeals seem to have thought that the results demonstrated his fluctuating capacity (and general improvement). Those scores are only suggestive of incapacity, and should be an indicator that further testing might be appropriate. There is no bright-line score for determining incapacity on the basis of those short examinations.

We often say that experienced lawyers can be pretty good at judging the competence of a client to make a will, sign a power of attorney or execute other documents. We (collectively) probably make better witnesses on those questions than even the doctors and medical staff attending to their patient (our client). Why? Not because we have better medical training — we obviously don’t. What we are better at is applying the legal tests of capacity to the person we meet with. “Can you name your family members?” and “What do you think a will is designed to do?” are questions that just don’t come up in most medical interviews.

What we are less good at, though, is recognizing undue influence. Of course we know the markers (social isolation, big changes in estate plans, active involvement by the person benefiting from the change, etc.), but we don’t see the daily interaction between our clients and their family members. That can make it easy for us to miss the significance of the influence brought to bear on our clients, even if we are vigilant and familiar with the circumstances and possibilities.

That concept was brought home this week while reviewing a recent California Court of Appeals case. Two brothers disputed the validity of a series of documents their mother had signed, and all were prepared by lawyers after close questioning by each. The two lawyers heard very different stories, and within days or weeks of one another. How could this have happened, and was there a way to avoid it in other cases?

The California case, Bellows v. Bellows (October 9, 2014), is an “unreported” decision. That means that it can’t be cited as a precedent in other, similar cases — but it doesn’t change the validity of the appellate court’s holding. That holding: the most recent documents signed by the mother were valid, at least partly because the contesting brother could not meet his burden of proving otherwise. But the story of battling lawyer visits was more poignant than the ultimate court holding was significant.

The saga began in 2002, when Ms. Bellows’ brother became ill. Her son Fred helped her deal with her brother’s illness, need for care, and ultimate death — and even the probate of his estate. After she inherited about $400,000 from her late brother, she and Fred visited her attorney about estate planning, and her stockbroker about setting up an account to hold the inherited money.

Ms. Bellows’ will and trust had previously provided for an equal division between her two sons, Fred and Donald. The upshot of the meetings with lawyers and stockbrokers was that Fred would inherit all of the money that Ms. Bellows had received from her late brother, and the balance of her estate would be divided equally between Fred and Donald.

It is worth noting that Fred went with his mother to most or all of her meetings with her stockbroker and her lawyer, though her lawyer took care to discuss her wishes in a separate session without Fred in the room. Her lawyer was certain that the changes she requested were her wishes, and that she was not being unduly influenced by her son.

About six months after those changes were completed, Ms. Bellows visited another lawyer — this time in the company of her other son, Donald. The new lawyer began the process of reviewing her existing estate planning documents, and considered her request for a change in the disposition she had planned. That new lawyer wrote to the lawyer who had prepared Ms. Bellows’ earlier documents, requesting a copy and more information.

The day after that meeting, Ms. Bellows was back in the original lawyer’s office with her son Fred. She told the first lawyer that she did not want to make any changes, and that she did not want to deal with the new lawyer any further. The first lawyer wrote to the new lawyer to tell her not to take any further action.

Nonetheless, Ms. Bellows was once again in the second lawyer’s office two days later. She signed a new power of attorney naming Donald as her agent rather than Fred, and she amended her trust to provide for equal distribution of all of her assets, including the inheritance she had previously earmarked for Fred. The second lawyer later testified that she was clear about her wishes, not being directed by Donald and could express her own wishes without any hesitation.

Shortly after those changes were made, the first lawyer visited Ms. Bellows at her apartment. She told him that she wanted Fred, not Donald, as her agent, and the lawyer prepared yet another power of attorney for her to sign. Since the beneficiary designation on the account holding her inheritance had never actually been changed, the first lawyer made no further changes.

When Ms. Bellows died three years after that sequence of events, the two brothers fought about whether there had been undue influence. Each pointed to the interviews their mother had had with the lawyers as evidence that the other had acted inappropriately. As the Court of Appeals noted, each of those two lawyers “apparently thought they were helping [her] resist improper pressure from the other brother.”

As noted in the introduction, the upshot was that the beneficiary designation favoring Fred was upheld, though mostly on the basis that Donald had not met his burden of proving undue influence in order to set it aside. But the real lesson, it seems to us, is that two lawyers — who we will assume (as the Court of Appeals did) were both well-meaning — could hear such different stories within days of one another.

What might either of those lawyers have done differently, in order to help make Ms. Bellows’ wishes clear? It is a challenge, but we have some ideas we follow:

Never start a client meeting with the family — meet first and alone with the client. If either lawyer could have said that they took no direction from either of Ms. Bellows’ sons, it would have been more powerful defense of their position. Who knows what she might have said if there was no opportunity for prompting or direction? A visit without either son present is good, but perhaps it should be clearer that neither son should have been actively involved at all.

Outside information might have been helpful to judge the effect on the client. The record is not clear as to whether either attorney asked for information from doctors, social service workers, psychologists, caretakers or others about Ms. Bellows’ daily life, and how susceptible she might have been to direction from others (including either or both of her sons).

Once such clear conflicts have been exposed, it’s time to step up the efforts to eliminate inappropriate influence. If, as the Court of Appeals suggested, the two lawyers each thought they were protecting Ms. Bellows from the other lawyer and the brother who was seen as the “real” motive force, perhaps they would both have served Ms. Bellows better if they had discussed their different views, figured out a way to reconcile them, and give Ms. Bellows the peace of mind that her wishes were in place and would not be changed at the insistence of either son. After all, Ms. Bellows’ peace of mind should have been a primary goal of her representation.

We have written before about the fact that, despite popular notions, will contests are actually quite rare. We have explained to our readers that mounting a will contest can be an expensive proposition, and that the likelihood of success is usually slight. Those observations remain true today, but that doesn’t stop family members (and even non-family claimants) from insisting that a loved one’s will is invalid because, well, it just is.

A recent Arizona appellate decision highlights the kind of objections we sometimes see. The case involves the estate of a man we’re going to call Ralph Dobson, who died in 2013.

Ralph had signed a will in 2010, naming his caretaker Margie as personal representative of his estate and his primary beneficiary. He did not name any of his children; an earlier, 2002 will had named his son Barney as personal representative and provided for the division of his estate into equal shares among his children. Margie, in addition to being Ralph’s caretaker, was also Barney’s ex-wife.

Barney objected to the admission of the 2010 will to probate. He argued that it was the product of undue influence, that Ralph had obviously not understood what he was signing (the will even made an error in Ralph’s full legal name), and that the witnesses could not even identify a photo of his father. He represented himself in the probate proceeding, challenged his ex-wife’s witnesses and exhibits, and explained his objections to the probate judge. He did not call any witnesses (other than giving his own testimony).

At the end of the trial in probate court, the judge found the 2010 will was valid and that it revoked the 2002 will. That meant Margie would be personal representative of the estate, and that the estate would go to her under the later will.

Barney appealed. He still represented himself, and he clearly did not understand how the appellate process worked. He attached exhibits to his appeal, apparently thinking the appellate judges would decide for themselves whether Ralph knew what he was doing. His appeals brief did not comply with the rule requirements. Ultimately, the Court of Appeals gave up, ruled that Barney had waived all his arguments and simply affirmed the probate judge’s determination that the 2010 will was Ralph’s final will. Estate of Demaree, April 18, 2014.

As we said, this new case does not break up any unplowed ground. There is nothing profound in the court’s holding, and no greater truth immediately apparent. What it does do, though, is to give us a chance to repeat this notion: will contests are difficult to sustain, they are infrequently filed, and they seldom succeed.

Would Barney have done better if he had hired a lawyer? Probably. We simply don’t have enough information to know whether there were facts to support his position, or whether a lawyer would have been able to ferret them out and produce the evidence the court would need to rule in his favor. We do know, though, that Barney was poorly equipped to see what information was truly relevant and even persuasive, and he did not do a great job of getting the important parts before the probate judge (and, later, the Court of Appeals).

Would a lawyer have been interested in Barney’s case? It’s impossible to be sure based on the record available, but it would not be too surprising if the answer turned out to be “no”.

Here are some of the notions that we often see among family members (which are, we might immediately note, not correct, at least in Arizona):

A will has to leave something to family members. Not true. You are completely free to disinherit your spouse, your children, even your minor children (caution: this principle is not the same in every state — we are talking here about Arizona). If you do, they might be entitled to a very small portion of your estate anyway — but that does not mean your disinheritance is invalid. You do not even need to name your children, and you certainly do not need to leave them even a nominal amount.

A will leaving everything to a non-family member is automatically suspect. Not true. While caretakers are often situated so that they are able to exercise undue influence, they are also often in a position to enjoy the genuine gratitude and affection of the person they were caring for. A good lawyer will insist on more information about the relationship before making any assumptions about a will challenge.

If a family member challenges the will, they will be entitled to receive something. This one is really hard for people to grasp sometimes. If you die without a will, your estate will usually pass to your children and your surviving spouse, in some proportions (it depends, in Arizona, on whether the children are all also your spouse’s children). If your will is invalid, and there is not an earlier will, then you died without a will. So there is simply no reason for your second cousin to want to challenge your will — even if it is completely invalid he will not receive anything from your estate (assuming you have any descendants or closer relatives).

Lawyers love to challenge wills. Nope, we don’t. It’s hard to do, and success rates are not high. Few lawyers will take on will contests on a contingency fee basis (though some might, depending on the facts) — so that means you’ll be writing checks every month to maintain any will contest, too.

When it’s obvious to everyone in the family that undue influence was exerted, that will be enough to challenge the will. Nope. The burden of proving undue influence is usually on the person challenging the will, and they have to show clear and convincing evidence of the undue influence. There is a rule that reverses the burden of proof in some cases, but it is not automatically triggered, and it’s not all that clear that it changes much about the requirements for challenging a will.

If the family can show that mom (or dad) was confused and disoriented, that will be all that it takes to defeat the will. Not at all. People with marginal capacity (or even largely incapacitated adults) may well be able to sign a will. All they have to have is the ability to identify at least some family members, to recognize that they have assets, and to understand that a will operates to pass assets at death. That’s not a very high barrier. And there’s something in the law called the “lucid moment” concept: people are presumed to be able to have a lucid moment even in a heavily foggy patch.

The lesson here: if you believe a spouse or parent was unduly influenced, you need to get good legal advice right away. Expect to pay for it — but if you don’t get counsel, you are much more likely to end up in the same position as Barney.

MARCH 4, 2013 VOLUME 20 NUMBER 9Last week we posed the question, and then mostly wrote about competence (or capacity) to sign a will. We promised to explain more about the level of competence required to sign other documents. So let us now tackle that concept.

A person with a diagnosis of dementia may well be able to sign legal documents, at least in Arizona. We suspect that the answer should be pretty much the same in other states, but if you are curious about your own state you should check with a local attorney about how competence is determined.

Generally speaking, competence or capacity is usually analyzed situationally. That is, the question will be answered differently depending on the nature of the document and the circumstances of the signing. The general rule: the signer has to have sufficient understanding to know what the document is, and the effect of the signing.

What kinds of documents might be involved? There are a variety of contexts in which capacity can be difficult to assess, including (but not limited to):

Ability to sign a contract — say to buy a car, or build a home.

Understanding of a power of attorney, which might give the authority to another person to sign future documents.

Competence to sign a trust, which might have elements of agency (like a power of attorney) and testamentary effect (like a will).

Capacity to get married (which is, after all, a specialized kind of contract).

Ability to make medical decisions — including refusing medication, or either seeking or declining mental health treatment.

Each of those situations, and the dozens of others that might arise, will be judged differently, because the nature and effect of the act will be different. But we can generalize about several of the important rules that cut across types of documents:

Minority is presumptive incapacity. That is, a person under age 18 does not have the legal ability to enter into a contract, get married, sign a trust (or will), or make medical decisions for themselves. There are, however, exceptions — a contract for “necessaries” (food, shelter, etc.) may be enforceable if signed by a minor. An “emancipated” minor may be able to do some things that an unemancipated minor can not.

It may not be necessary to have capacity to do the underlying thing before giving the authority to someone else. What? Let us explain: a person who might not have the capacity to enter into a complicated contract might still have sufficient capacity to sign a power of attorney giving someone else the power to sign the contract.

Arizona’s legislature has decided that the capacity level required to sign a trust should be the same as testamentary capacity, as we described last week. That may mean that someone who does not have sufficient capacity to sign a power of attorney could nonetheless sign a trust, which gives even broader authority to the trustee. Odd result, but mostly theoretical, as it’s hard to find someone in just that circumstance.

Generally speaking, most observers think that the capacity to sign a will is a lower level of competence than contractual or other forms of capacity. But it might not be that hard to describe someone who adequately understands the nature of a power of attorney but does not have an understanding at the level of testamentary capacity.

There are few legal ways to determine capacity in advance. Challenges to capacity are almost always initiated after the signing is completed — and often after the signer has died, or become completely and undeniably incompetent. That means that evidence of capacity (or lack of capacity) is often being reconstructed well after the fact.

It’s also important to remember that we are writing here about competence/capacity, and not necessarily about the validity of documents signed by someone with dementia. In response to our article last week, one reader wrote to us:

“You covered dementia issues very clearly. Thank you! But what about the issue of undue influence in the presence of known dementia where, in principle, the demented person otherwise possesses testamentary capacity? How does the mix of those two aspects play out?”

It’s a very good point. There is a difference between capacity (or competence) on the one hand, and undue influence on the other. Dementia might make a given signer incapable of signing a document, or their competence may be sufficient to sign. But that same person might be made more susceptible to undue influence because of their dementia.

What do we mean? Let’s give an example — drawn from our considerable experience with the distinction. An elderly widower, living alone, has a diagnosis of dementia. He is nonetheless charming, witty and perfectly able to discuss his wishes. He can recall the names of his three children, and of his seven grandchildren. He can report their ages, the cities they live in and their careers (or status as students) — and he is mostly correct, though sometimes his information is two or three years out of date.

This gentleman’s daughter lives in the same city, and is the one who oversees his living arrangements and care. She does his shopping, hires people to check on him daily, takes him to doctors’ appointments, writes out his checks (he still signs them) and otherwise helps out. She also talks to him endlessly about how his other two children don’t deserve to end up with his house and bank accounts, how she really ought to be the one who benefits from his estate, and how his late wife (her mother) always wanted her to inherit everything. Eventually he agrees to sign a new will and trust, mostly to stop her constant harangues.

Was he competent to sign the new estate planning documents? On the facts as we’ve given them here, probably yes. Was he unduly influenced? Very likely. Was that influence facilitated (and the proof made easier) because of his dementia? Absolutely.

When did the daughter’s behavior cross the line? The legal system isn’t actually very helpful, since the answer is defined in a circular fashion. Her influence was “undue” when it resulted in her wishes being substituted for his. It was not necessarily objectionable (at least not legally) when she told him what she wished he would do, what her mother had wanted, or what was fair. But at some point she may well have turned ordinary familial influence into “undue” influence.

We hope that helps explain this complicated and nuanced area of the law. But we want to leave you with a completely unrelated, but important, note: Kieran Hartley York joined the Fleming & Curti family (literally) on Sunday, March 3. We are delighted to have met the little guy, and look forward to great things from him in the future.

FEBRUARY 25, 2013 VOLUME 20 NUMBER 8
Let’s get the answer to the question out of the way first, and then we can deal with more nuance. Yes, a person with dementia may be able to sign legal documents.

The inability to sign documents (what is usually known in the law as “incompetence” or, sometimes, “incapacity”) is a factual issue. In order to know whether a person is competent to sign, say, a power of attorney or a will, one must know what understanding the signer had at the time.

Capacity or competence are tested a little differently depending on what documents the person is signing. The most highly-developed law of capacity, unsurprisingly, centers on the level of understanding required to sign a will. That standard is almost universally referred to as “testamentary capacity.” Although precedent for defining testamentary capacity goes back at least to mid-sixteenth century England, the standard is occasionally restated or reformulated.

Arizona’s Supreme Court most recently reviewed testamentary capacity in 1973. In that case the Court described the woman who signed a will as:

“94 years old at the time she executed her will. She had very poor eyesight and was deaf in one ear and partially deaf in the other. As a result of previously broken hips, she used a “walker” to move around. Evidence shows that she was forgetful and did not remember the names of her great grandchildren. She spilled food when she ate and went to the bathroom frequently. She had a short attention span and it was difficult for some people to talk with her.”

The Court goes on to describe the three-part test for capacity to sign a will. A signer must have:

the ability to know the nature and extent of one’s property,

the ability to know the natural objects of one’s bounty, and

the ability to understand the nature of the testamentary act.

Estate of Vermeersch, 109 Ariz. 125 (1973).

The standard of testamentary capacity, then, is quite low. Even people suffering from delusions or hallucinations have been found to have testamentary capacity. In an earlier Arizona Supreme Court case, the signer of a will had deteriorated markedly near the end of her life (and before her will was signed):

“during the last three years of her life she became coarse and profane. The testimony is to the effect that she shrieked and screamed at all hours of the day and night. That she mistreated her brother and cursed him, although he diligently performed his tasks around the house. That she became utterly careless in her dress, took to wearing very little clothing, rarely combed her hair or bathed, and on occasion was indecently exposed in the presence of neighborhood children. She stopped taking care of her house, stopped cooking, and ate from cans, although she fed her animals and chickens better food. She affirmed a belief in the ‘power of thought’ and practiced ‘black magic.’ She thought she could cast spells on people and tried to put a hex on the family next door so they would move out. She sat in the outhouse behind her home and watched the neighbors’ children from a peephole or stalked up and down along the fence between their property, glaring and gesturing to them and sticking out her tongue, in her efforts to get them to leave. She declared that the members of a church on the corner were praying for her to die so that they could acquire her property, when in fact, according to the minister, they wanted to move to another part of town. She was suspicious of people and built a fence around her house to ‘keep my enemies out’ and hung a padlock on the gate. In the last months before her death her conversation became incoherent and her mind wandered, she was forgetful and childish, and she seemed even more quarrelsome and ill-tempered than before.”

Despite that description, the will was found to be valid because the evidence did not specifically point to any relationship between her deteriorating mental condition and the terms of her will. Estate of Stitt, 93 Ariz. 302 (1963).

In yet another Arizona case, the will of a developmentally disabled man was upheld, even though he was said to function at about the mental level of a child of 10 or 12. Estate of Teel, 14 Ariz.App 371 (1971). In that case, the court quoted a standard legal text of the time for the proposition that “testamentary capacity is not the same as the ability to transact ordinary business.” That principle is still true today.

So can a person with dementia sign a will? Yes, so long as he or she can identify family, assets, and the purpose of making a will. A diagnosis of dementia may be evidence of some limitation in those abilities, but many demented individuals — particularly those early in the dementia process — can satisfy those minimal requirements.

What about other legal documents, like contracts, powers of attorney, deeds and the like? The answers will vary depending on the type of document, the circumstances of the signing and the nature and extent of the dementing condition. We’ll talk about those issues in a future installment.

Linda Samson (not her real name) was a widow, living in her own home in Minnesota. She had two children, a son and a daughter. She and her late husband had created a living trust several years before her husband’s death; it provided that after the second spouse died, the remaining estate would be divided into three shares. One share would go to the couple’s daughter, another to their son, and the third to their son’s wife.

In 2003 Linda was diagnosed with “early-state Alzheimer’s disease.” In 2006 she signed an amendment to her trust deleting both her daughter and daughter-in-law (and leaving everything to her son). In 2008 she signed two deeds to her home — one transferred her home out of the trust and into her name alone, and the second one transferred her home from her name into her son’s name (but reserving a life estate for herself).

Between her initial Alzheimer’s diagnosis and 2008 Linda’s medical records periodically referred to her memory loss but indicated that she was stable. She continued to live at home, though with some assistance. She had a sharp mental decline in the summer of 2008, and by fall of that year a home health agency was recommending 24-hour care. She moved into a nursing home in the spring of 2009, was enrolled in a hospice program and died in June of that year.

Linda’s daughter objected to the 2006 amendment to Linda’s trust and to the 2008 transfer of her home. She argued that her mother lacked the capacity to sign either of those sets of documents, and/or that her brother must have unduly influenced their mother to his own benefit (and her detriment).

The probate judge heard testimony from several people who knew and/or treated Linda. Two expert witnesses hired by her daughter, both doctors, had reviewed Linda’s medical records but had never met her. They testified that her capacity was obviously diminished, and that it would have been possible to unduly influence her.

On the other side, the lawyer who prepared the trust amendment and the deeds to her house testified that, though he had not met his client before, she seemed to be able to explain her reasoning for the changes and she knew who her children were and what she was doing. He testified that she had told him that it saddened her that her daughter was not very involved in her life, but that she was pleased at the extra care and attention she received from her son and his son, her grandson.

Both the initial and the follow-up sets of appointments with the lawyer had been arranged by Linda’s son, but in both cases (he testified) it was at her request. Although the lawyer had met with both Linda and her son initially, further discussions were with Linda alone; the transfer of the house had actually been initiated by the lawyer rather than either Linda or her son. The lawyer pointed out that it didn’t really change the disposition of her estate at all, since Linda’s son was already the sole beneficiary of her trust estate.

There was one odd moment, according to the lawyer’s testimony. During one of the interviews with Linda he sought to establish that she knew her family members and the relationships (a key part of the standard for determining testamentary capacity). When he asked Linda about her daughter, she said that she was sorry that they were not closer, that the daughter was on her third husband (in fact, her husband had just died), and that her daughter had suspected that she, Linda, had had an affair with the husband. When the lawyer expressed surprise and asked follow-up questions, Linda dismissed the idea and said she had gotten confused; that had been the plot of a biblical story she had read.

After trial, the probate judge ruled that Linda’s daughter had not proven that her mother lacked testamentary capacity OR that her brother exercised undue influence. The judge noted that the supporter of questioned documents has the burden of proof that the documents were executed properly. After that, though, the contestant of a will or trust has the burden of proving allegations of undue influence or lack of testamentary capacity. Linda’s daughter introduced testimony that there could have been undue influence, and that Linda’s capacity might be suspect — but her burden had been to prove that there was undue influence, or that Linda actually did not understand what she was signing.

The Minnesota Court of Appeals agreed, upholding the probate judge’s ruling. The appellate judges had the same understanding of the burden of proof, and saw no reason to set aside the probate judge’s findings. Linda’s last trust changes, and the transfer of her home to her son, were both upheld. In the Matter of the Smith Living Trust, August 20, 2012.

This Minnesota case is not the most eloquent on the subject, and of course it would have little or no precedential value in Arizona. The opinion is also “unpublished,” which means that the Minnesota Court of Appeals decided that it should not be cited as precedent even in Minnesota itself. Still, there are several reasons we like the decision and call attention to it here:

It is a nice exposition of the “burden of proof” issue, pointing out that many will and trust contests lose not because the proponent of the document prevails but because the contestant fails. Generally speaking, the person who challenges a will, trust, deed or other estate planning document has to overcome the presumption that the signer was competent and knew what he or she was doing.

It describes the sorts of things a good lawyer should do to protect the validity of documents he or she prepares. The lawyer met with Linda alone (we would have liked it even better if he had never met with Linda and her son together, but at least he dealt primarily with Linda directly), the deed change was prompted not by Linda’s son but by the lawyer himself, the lawyer could testify that he routinely took steps to assure that his clients are competent and aware of what they are doing.

On the other hand, the contestant had to rely, as is often the case, on inference and reconstruction. The contestant’s two expert witnesses had never met Linda, and their opinions were consequently guarded (they said that she was susceptible to undue influence, but they could not testify to the extent of any influence they might suspect).

Perhaps most importantly, the opinion makes clear that even someone with a long-standing diagnosis of dementia might still be able to sign estate planning documents. Testamentary capacity (the ability to sign a will) is not immediately compromised by virtue of a dementia diagnosis; Linda had carried her diagnosis for several years but still had the capacity to understand the nature of her trust change, to identify her family members and to describe what assets she wanted to pass to her son. The fact that she had one episode of fairly serious confusion did not prevent her from signing her new trust.

This is a question we have addressed before, in discussing a 1996 Mississippi case. It comes up from time to time and in different circumstances. The Mississippi case described earlier, for instance, involved a conservatorship rather than a guardianship proceeding, though the principles are the same in either circumstance. The bottom line, as described in our earlier article, is that a person may be able to sign a new will in Arizona — even if they have been determined to be incapacitated, or in need of (financial) protection.

A recent Arizona Court of Appeals decision revisited the question, with a slight twist. John Bartlett (not his real name) had been the subject of both a guardianship and a conservatorship order since 2004. On May 28, 2008, the probate court held a hearing on his request to terminate his guardianship. He maintained that he no longer needed a guardian, but the probate judge decided that he continued to be incapacitated — that is, that he was still unable to make responsible decisions regarding his own care.

That very same day John signed a new will. In it, he disinherited his daughter (his only child) and left his entire estate to his grandson. The document also revoked an earlier will, signed before the guardianship proceedings were begun, which had named his daughter as his personal representative and left his entire estate to her.

When John died a few months after signing his new will, a probate court dispute ensued regarding which document was valid. Did John have the capacity to revoke his old will, and to disinherit his daughter? Both wills were submitted for consideration, and the probate court found the new will to be valid and admitted it to probate.

When the personal representative of the estate filed a final report with the court, John’s daughter objected that her challenge to the new will (and to a trust signed the same day) had not been resolved. The estate’s personal representative disagreed, and filed motions to strike the daughter’s pleadings, enter summary judgment in favor of the later will, and close the estate. In a series of hearings, the probate court granted all of those requests.

The Arizona Court of Appeals disagreed. Although John’s daughter had not put on any evidence — indeed, she had not even filed any pleadings expressly objecting to the summary judgment request — the probate court should have been on notice that there was substantial evidence of John’s incapacity. The fact of a guardianship proceeding was enough to raise doubts about his ability to sign a new will, and summary judgment — entered without taking any evidence — was improper, according to the appellate judges.

The Court of Appeals takes pains to make clear that it is not holding that John’s will is invalid, or that people under guardianship can not sign new wills. In fact, the mere existence of a guardianship does not (in Arizona, at least) even create a presumption of incapacity to sign a will. But the existence of the guardianship proceeding, and especially the guardianship finding on the very day John signed his new will, should have alerted the probate court that there was some evidence in support of a challenge to that will. Estate of Blackford, March 13, 2012.

NOVEMBER 7, 2011 VOLUME 18 NUMBER 38
A woman has been diagnosed as suffering from dementia of the Alzheimer’s type, and she resides in an assisted living facility. She has short-term memory loss, is frequently forgetful and has difficulty with tasks like playing cards and operating her television set. Can she sign a new will?

That is the legal question posed by Clara Marsh’s will, which she wrote out in longhand and signed in 2006. Ms. Marsh died two years later, and her son and daughter ended up in a legal battle over whether the will was valid.

To be more precise, Ms. Marsh’s will actually presents two related but independent legal questions. First: was she competent to sign the will on the day she did? Second: if she was competent, did her son and daughter-in-law exert undue influence on her in connection with the new will?

A brief background is in order. Ms. Marsh had a 1996 will that left everything equally to her two children. When she moved into a condominium in 2003, she wrote to the children telling them that she intended to leave her new home to her son Richard. He had helped her with the purchase, and she explained to the children that she had placed her new home in joint tenancy (with right of survivorship) with Richard. She did not, however, sign a new will at that time.

In 2006 Ms. Marsh moved to an assisted living facility, and the condominium was sold. The proceeds from that sale then became a bone of contention between her son Richard and her daughter Elaine Grayson. Richard thought the proceeds should be put into an account in his and his mother’s names as joint tenants; Elaine insisted that the proceeds be placed in an account in Ms. Marsh’s name alone.

As the two siblings (and their respective spouses) debated how to handle the sale proceeds, Elaine’s husband John filed a guardianship petition. He alleged that Ms. Marsh had Alzheimer’s disease and dementia. Richard opposed the guardianship petition, and the relationship between the two couples deteriorated.

A month after the guardianship was filed Ms. Marsh prepared a one-paragraph will in her own handwriting. It said:

Because of all the legal problems Elaine and John are causing, I am afraid my final wishes will be ignored. To prevent this from happening, this is my new will: I leave everything to my son Richard and his wife Sam. I love you all very much.

This new will was witnessed by Ms. Marsh’s priest and the church secretary. She apparently did show it to Richard shortly after she signed it (he says he told her to “hide this someplace” and think it over), but she did not share it with Elaine or her husband John.

After Ms. Marsh’s death in 2008, Richard filed the handwritten will with the Ohio probate court. Elaine objected, arguing that (a) Ms. Marsh had been incompetent at the time of the will’s signing, and (b) Richard and his wife had exerted undue influence over Ms. Marsh to get her to disinherit Elaine. The probate court granted summary judgment to Richard, thereby dismissing the objections raised by Elaine.

The Ohio Court of Appeals agreed with the probate court on the first issue, but sent the dispute back to probate court for further proceedings regarding the undue influence count. Despite a diagnosis of dementia, and despite forgetfulness and confusion, the appellate court agreed that Ms. Marsh appeared to understand the things needed to make a valid will. She knew who her children (and in-laws) were, and even though she may not have known the precise nature of her assets she did understand what was involved with her estate. She knew she was making a will, and the effect of doing so. Summary judgment was appropriate on the question of her legal capacity to sign a will. Despite her limitations, despite her diagnosis and despite her living situation, she was able to make her new will.

But it still might be possible to show that she was subjected to undue influence, and the appellate court took pains to distinguish the two concepts. Undue influence, the court noted, is not the same as general influence — even “strong and controlling” influence. To be “undue,” influence must be so pervasive and effective as to result in the document reflecting the wishes of the influencer and not those of the signer. That is a high barrier for a will challenger to cross, but Elaine should be given a chance to introduce evidence to support her claim, ruled the Court of Appeals. In Re Estate of Marsh, October 28, 2011.

Other than the obvious (“don’t exercise undue influence over seniors”), what lessons can we take from Ms. Marsh’s story to guide our actions when working with seniors like her? We might submit a couple for your consideration:

Don’t forget that, while you and other family members dispute how best to handle the senior’s finances (or life), he or she may have some strong opinions and may actually feel affected by your decisions, arguments and tactics.

“Winning” may not be as important in family disputes as figuring out a way to get along. The cost of this particular dispute: thousands of dollars in legal fees, irreparable damage to family relationships and (and not least) psychic injury to the individual everyone was trying to protect.

Family disputes are sometimes about the best interests of a vulnerable family member, sometimes about dollars, sometimes about pride, and sometimes about control. In our professional experience, those last are often the most difficult ones to resolve.

Contrary to public perceptions, will contests are actually rare. In fact, few wills are written in such a way that anyone would benefit from a contest — most wills leave property to the same people who would inherit if there was no will. When there is a will contest, however, the two most common grounds are allegations of (1) lack of testamentary capacity, or (2) undue influence exerted by someone. A recent Texas case highlights the differences between those two allegations.

Evelyn Marie Reno died at age 81. She had been married twice, and left three children from her first marriage and one daughter from the second. The youngest child, Jan LeGrand, did not get along well with her half-siblings. Relationships between Ms. Reno and the three children from her first marriage were also strained — at least partially because two of them had initiated a guardianship proceeding (which was later dismissed) against their mother.

Ms. Reno spent the last year of her life in a nursing home. Ms. LeGrand visited her regularly, paid all her bills, and kept her location a secret from her half-siblings. At some point in the year before she died, Ms. Reno asked her daughter to help her prepare a new will disinheriting her other three children and leaving her entire estate to Ms. LeGrand.

The will was prepared (by Ms. LeGrand), and signed in Ms. Reno’s nursing home room. The witnesses were a hospice worker and chaplain, and the notary public was a nursing home employee. Ms. LeGrand was asked to leave the room while the three non-family members discussed the will and watched her sign it.

After Ms. Reno’s death the will was filed with the probate court by Ms. LeGrand. The three half-siblings proposed an earlier will, which left most of the estate to the four children equally.

The Probate Court ruled that Ms. Reno lacked testamentary capacity at the time the last will was signed, and that she was subjected to undue influence by her daughter. The earlier will (and a codicil) were instead admitted to probate.

The Texas Court of Appeals analyzed the findings of the Probate Court, and modified the basis for its findings — while not changing the result. The evidence, according to the appellate court, showed that Ms. Reno DID have testamentary capacity. Though she was often confused, the two witnesses and the notary agreed that the will was signed on a good day. Evidence of confusion and occasional disorientation on days before and after the will signing was not enough to overcome the testimony that she knew what she was signing, who her children were and what she intended to do at the time she signed the will.

The appeals judges agreed with the Probate Court, however, on the subject of undue influence. A key part of the evidence considered by the Court of Appeals: the fact that the will was actually prepared by Ms. LeGrand. As the Court wrote: “the fact that LeGrand personally prepared teh will without the intervention of an atotrney or other third party is significant.”

Also important to the court’s analysis: Ms. LeGrand had sole access to Ms. Reno for more than a year (during which time their mother’s whereabouts were not shared with the other three children). During that time, noted the Court of Appeals, Ms. Reno was completely dependent on Ms. LeGrand for bill-paying, care management and personal contact.

A more subtle distinction is drawn by the appellate judges with regard to Ms. Reno’s declining mental status. Though her condition at the moment of signing the will did not support the allegations of lack of testamentary capacity, her growing confusion and periodic mental weakness made her susceptible to undue influence.

Finally, the Court of Appeals notes that the will prepared by Ms. LeGrand for her mother was a complete shift from her prior wills. In each of those she made specific bequests to her four children and thirteen grandchildren, plus hospitals, her church and her pastor. The last will, however, left everything to one daughter — and this significant change in her dispositive plan was yet another indication of undue influence.

Though family members often confuse the concepts of testamentary capacity and undue influence, the legal analysis of the two different approaches to will contests is well-developed. It is also important to note that not every attempt to talk someone into making a new will is automatically subject to challenge. As the Reno court opined, in somewhat dry legalistic language: “One may request, importune, or entreat another to create a favorable dispositive instrument, but unless th eimportunities or entreaties are shown to be so excessive as to subver the will of the maker, they will not taint the validity of the instrument.”

The difference between “lack of testamentary capacity” and “undue influence” is legalistic, to be sure, but it is more than just academic. Interestingly, the Texas Court of Appeals noted that there is a difference in the burden of proof borne by the parties in the two different kinds of cases. In a case alleging lack of testamentary capacity the proponent of the will has the burden of proving that the testator understood what she was doing. In an allegation of undue influence, the challenger carries the burden of proof.

That means that each side in Ms. Reno’s case met their burden of proof. That is, Ms. LeGrand showed that her mother understood what she was doing, but the other three children demonstrated that Ms. LeGrand unduly influenced their mother. Estate of Reno, December 18, 2009.

An individual must be mentally competent before making a valid will, signing a contract or executing almost any legal document. Confusion often arises because the level of competence required may vary depending on what sort of document is being signed.

Take the case of Agnes Marquis of Bangor, Maine. In November, 2000, she met with her insurance agent for over an hour, discussed her plans with him, and then signed a change of beneficiary form naming nephew Daniel Pelletier to receive several annuity contracts. She told the insurance agent that Mr. Pelletier was the only relative who visited her on holidays, and he helped her run errands.

At about the same time Ms. Marquis was having other problems, according to witnesses. She believed that someone was talking to her through her television, that her dog had nursed her back to health when she fell ill, that unidentified Quakers were going to break into her house at night, and that she was going to marry Jesus. Ms. Marquis visited her doctor a week before and three weeks after she changed the annuity beneficiaries, and both times she was diagnosed as suffering from dementia.

Demented, delusional individuals can still sign new wills and change beneficiaries if they have the necessary level of mental capacity. The question in Ms. Marquis’ case was which level of capacity she needed.

Mr. Pelletier argued that the proper standard was “testamentary” capacity—the level required to make a change to one’s will. Under that test, Ms. Marquis would only have to know who her relatives were, have a general notion of the nature and extent of her assets, and understand the concept of naming someone to receive property after her death. The administrator of her estate argued, however, that Ms. Marquis required “contractual” capacity—the ability to understand the nature of an annuity contract as if she were entering into a new agreement, rather than simply changing beneficiaries. After a hearing the probate court agreed that contractual capacity was the proper standard, and that Ms. Marquis did not have sufficient capacity to change beneficiaries.

Maine’s Supreme Judicial Court upheld the trial judge’s decision. Though changing beneficiaries in an annuity or life insurance contract resembles making a will, it is really a revision of a contract and requires the higher level of capacity. The Court also ruled that there was sufficient evidence that Ms. Marquis lacked the necessary capacity, and ordered that the annuity proceeds be paid to her estate for distribution to the charities named in her will. Estate of Marquis, May 12, 2003.